Tax Breaks for College Boosters Come Under Scrutiny

Tax breaks offered by universities for football-stadium luxury boxes and naming rights are drawing criticism from members of Congress and other policy makers, reports The Wall Street Journal.

The tax-exempt status of college sports programs had been under investigation during the past year by Rep. William Thomas, a California Republican who is retiring from Congress and from his leadership of the House Ways and Means Committee.

Sen. Charles Grassley, Republican of Iowa, said he was considering continuing where Mr. Thomas left off, and seeking to determine whether corporate sponsorships and television deals are consistent with colleges’ tax-exempt status, the newspaper reported.

Sen. Max Baucus, the Democrat who is taking over Mr. Grassley’s job as head of the Senate Finance Committee, has expressed interest in whether tax breaks for athletic facilities and programs channel money into efforts to help poor students go to college.

The Universities of Michigan, Illinois, and Maryland, among others, are planning millions of dollars of football-stadium expansions, including dozens of luxury suites to be leased for as much as $59,000 a year. Donors are allowed to deduct 80 percent of the sum they pay for the boxes.

University officials and others who support the tax breaks say they bring in dollars for academic programs and scholarships for students from poor families. But critics argue that leasing payments and naming rights shouldn’t receive tax benefits since the donor receives access to a luxury box or advertising in return for the payment.

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